Early trading sees Indian rupee nearly flat versus the US dollar

13 Jul 2022 , 10:26 AM

On Wednesday (13-07-2022), the equities markets rose at the start of the day and retail inflation decreased, and the rupee opened the session at the same value against the US dollar as the previous day.

Early trading was characterized by cautious investors due to the high dollar relative to other major currencies and capital flight, according to forex dealers.

At the interbank foreign exchange, the rupee started off well versus the US dollar at 79.55 before turning volatile and trading in a narrow range between 79.53 and 79.60. Early trades showed the native currency at 79.58 versus the US dollar, up barely 1 paisa from the previous close.

The rupee had already reached an all-time low against the dollar in the previous session, closing at 79.59. The 30-share Sensex was up 206.14 points, or 0.38 percent, at 54,092.75, while the larger NSE Nifty gained 61.65 points, or 0.38 percent, to 16,119.95 on the domestic stock front. The dollar index, which measures the strength of the dollar against a basket of six different currencies, increased 0.12% to 108.20.

Benchmark Brent crude futures increased 0.29% to USD 99.78 per barrel of oil. Although retail inflation moderated somewhat in June to 7.01 percent, it remained beyond the central bank’s tolerance range for the sixth consecutive month, indicating that future interest rate rises will continue.

Government statistics made public on Tuesday indicated that May’s retail inflation rate was 7.04 percent. Although retail inflation moderated somewhat in June to 7.01 percent, it remained beyond the central bank’s tolerance range for the sixth consecutive month, indicating that future interest rate rises will continue.

According to exchange statistics, foreign institutional investors continued to be net sellers on Tuesday in the capital market, selling shares worth Rs 1,565.68 crore. From 6.7 percent in April, factory production growth accelerated to a 12-month high of 19.6 percent in May.

Finance Minister Nirmala Sitharaman stated on Tuesday (12-07-2022) that the government is monitoring the price situation and would keep up the targeted attack on inflation despite the fact that consumer price index-based inflation is still high.